Q1 2000 Revenues Up 75% Over Q1 1999, and 19% Over Q4 1999
BETHLEHEM, Pa., April 25 /PRNewswire/ -- FASTNET Corporation,
(Nasdaq: FSST), a growing Internet service and application hosting provider
offering businesses high-speed dedicated Internet access and a suite of
enhanced products and services, today announced first quarter results for
2000.
Summary of Financial Results
(unaudited; dollars in thousands except per share amounts)
Three Months Ended Three Months Ended
Mar 31, Mar 31, Change Mar 31, Dec 31, Change
2000 1999 2000 1999
Total
Revenues $ 3,030 $ 1,734 75% $ 3,030 $ 2,546 19%
Operating
Expenses $ 7,180 $ 2,073 246% $ 7,180 $ 4,886 47%
Operating
Loss $ (4,150) $ (339) 1123% $(4,150) $(2,340) 77%
Net Loss $ (4,222) $ (393) 973% $(4,222) $(2,471) 71%
Basic and
Diluted Net
Loss Per
Common
Share $ (0.36) $ (0.06) 500% $ (0.36) $ (0.33) 9%
Basic and
Diluted Wtd.
Avg. Shares
Out-
standing 11,690,105 7,000,000 11,690,105 7,546,984
KEY DEVELOPMENTS - First Quarter 2000
-- Completion of the Initial Public Offering on February 7, 2000 raising
net proceeds of $49.6 million.
-- Doubled the planned market expansion to be in a total of 47 markets by
year-end 2000.
-- Record customer growth in the first quarter of 2000.
"We are enthusiastic about our growth. Our strong first quarter results
are an early indication of the company's potential and we continue to expand
our business Internet customer base in selected high-growth secondary markets
with our unique business Internet products and services. On the heels of our
recent IPO, I am pleased to say that the core growth plan is on target, and
that we have found additional efficiencies that will allow us to accelerate
our revenue generation in two ways. First, we are executing on our previous
announcement of increasing the number of new markets in 2000, and we are
actively pursuing relationships that will improve both revenues and operating
results. We remain focused on reaching EBITDA positive results and are
committed to providing value to our shareholders, customers, and employees."
--David Van Allen, CEO
First Quarter 2000 Results
Total revenues for the first quarter of 2000 were $3.0 million, as
compared with $1.7 million in the first quarter of 1999, representing an
increase of 75% over the prior year and a 19% increase over the fourth quarter
of 1999. This increase was primarily a result of revenues derived from the
Company's expansion into four new markets in the northeastern US in the fourth
quarter of 1999. Typically the Company will generate revenues within 90 days
of entering a new market. Also adding to the increase was the growth in new
customers in the Company's existing markets coupled with increased sales of
its enhanced products and services to its existing customers. The Company
also reports a 45% increase in the number of customers using our business
class connections in the first quarter of 2000 over the fourth quarter of 1999
and 159% increase compared to the first quarter of 1999.
The company also saw an increase in revenues over the fourth quarter of
1999 from its web hosting and colocation service offerings under the brand
name Hostme! FASTNET positioned itself for strong growth in this rapidly
expanding market segment by its acquisition of Internet Unlimited's Hostme!, a
web hosting and application service provider, in July of 1999. FASTNET saw a
32% growth in its web hosting and colocation customers in the first quarter of
2000 compared to the fourth quarter of 1999.
Total operating expenses for the first quarter of 2000 were $7.2 million,
as compared with $4.9 million in the fourth quarter of 1999, representing an
increase of 47%. Operating expenses, which consist of cost of revenues;
selling, general and administrative expenses; and depreciation and
amortization, increased to 237% of revenues in the first quarter of 2000, from
192% of revenues for the fourth quarter of 1999. This increase primarily
resulted from the growth in the number of personnel in all areas of the
Company from 91 at December 31,1999 to 102 at March 31, 2000. Increased
bandwidth at existing facilities and telecommunication circuits servicing new
markets also added to the increased operating costs. FASTNET, because of its
rapid market deployment strategy, now operates in secondary markets in five
states and the secondary market around Washington, DC. Net loss for the first
quarter of 2000 was $4.2 million, or $0.36 per common share, as compared to a
net loss of $2.5 million or $0.33 per common share for the fourth quarter of
1999. Included in the net loss for the first quarter of 2000 were non-
recurring charges of approximately $705,000, or $0.06 per share. These non-
recurring charges relate to one-time compensation charges and imputed interest
associated with warrants attached to a January 2000 bridge financing, prior to
the initial public offering.
FASTNET Corporation Management Comments
David Van Allen, CEO said, "FASTNET is a leader in providing business
Internet services to companies located in selected secondary markets. Our
strong results from the first quarter are a direct reflection of the early
success of our strategy. In these targeted markets we are very effective at
combining reliable high-speed Internet access with a suite of enhanced
products and services and delivering them to our customers in a fast and cost
effective way. Before year-end 2000, FASTNET's business-class Internet
services will be within the reach of thousands of additional customers in our
targeted high-growth secondary markets which stretch from Boston MA. to
Washington DC, and from the east coast to the key secondary markets in the
mid-west. This represents a tremendous first-mover advantage for FASTNET."
FASTNET's Chief Financial Officer Stanley Bielicki, stated: "FASTNET has
opportunities ahead. The company continues to augment and align our sales and
marketing efforts to be in a winning position as we go though 2000. Adding
new customers to existing capacity and focusing on high margin enhanced
services will enable us to move towards positive cash flows from operations.
We are seeing increased demand for our brand of web hosting products and that
bodes well for our ASP initiative as we deploy this product. Both of these
services have great long-term value and profit potential."
Van Allen also remarked about the company's future. "Our goal is to
rapidly grow our customer base, while maintaining a clear path to
profitability. We will continue to seek out strategic relationships that will
add to our financial strength and that will help us continue to differentiate
ourselves as the leader in business Internet services. As FASTNET's growth
continues we will remain a long-term partner to our new and existing customers
and as such, generate value to our shareholders."
About FASTNET
FASTNET Corporation is a business Internet service, web and application
hosting provider based in Bethlehem, PA. The Company is currently building
broadband infrastructure in high-growth secondary markets to provide high-
speed, dedicated and reliable Internet service to primarily small and medium
sized enterprises. These customers typically outsource most of their data
communications needs to FASTNET and become long-term customers.
Over the past five years the Company has been providing Internet services
to a growing number of customers that are located outside of the major
markets, where businesses typically find it challenging to locate a single
source solution for high-speed dedicated Internet access. The company provides
value to its customers by offering a suite of enhanced services such as
managed and monitored security; web hosting and e-mail based unified
messaging.
FASTNET's network architecture is designed around regional Customer
Network Facilities. A CNF is a small, yet high capacity data center with
redundant high-speed connections to national Internet backbones, and private
connectivity back to FASTNET's centralized Network Operations Center. This
configuration allows FASTNET customers the most reliable and redundant access
to the Internet as well as availability to FASTNET's enhanced products and
services. Customers can connect to CNF's by way of various carrier
technologies such as classic Telco provided T1 - T3 services, frame relay,
wireless and Digital Subscriber Line ("DSL") services.
FASTNET's CNFs are carefully positioned in selected high growth secondary
markets, normally 20 - 50 miles outside of major metropolitan areas. FASTNET
is building CNFs aggressively throughout the densely populated northeast
portion of the US as the company plans to expand nationwide.
The Company sells a suite of value added enhanced services to its directly
connected customers, and in many cases, any customer regardless of their
Internet service provider. These services include the Company's TMS (TM)
brand Total Managed Security, a cost effective electronic security solution
that FASTNET monitors and manages 24 hours a day, email-based unified
messaging, VPN services, and business-class web hosting, colocation and ASP
services.
The Company's common shares are listed on the NASDAQ National Market under
the symbol "FSST." For more information on FASTNET, visit the Company's web
site at http://www.fast.net or call 1-888-321-FAST.
Forward Looking Statements
This news release contains comments or information that constitute
forward-looking statements (within the meaning of the Private Securities
Litigation Reform Act of 1995), which involve significant risks and
uncertainties. Actual results may differ materially from the results
discussed in the forward-looking statements. These forward-looking statements
are subject to risks and uncertainties, including but not limited to
fluctuations in operating results, additional capital requirements,
competition, integration of acquisitions, history of losses, and
implementation of network infrastructure. You should review carefully the risk
factors set forth in our annual report on Form 10-K as filed with the
Securities and Exchange Commission. The information contained herein is
current only as of the date of this release and we undertake no obligation to
update the information in this press release in the future.
FASTNET Corporation
Summary Financial Data
Three months ended
March 31,
2000 1999
REVENUES $ 3,030 $ 1,734
OPERATING EXPENSES:
Cost of revenues 2,471 1,194
Selling, general and
administrative 3,707 751
Depreciation and amortization 1,002 128
Operating loss (4,150) (339)
Other, net (72) (54)
NET LOSS $ (4,222) $ (393)
Basic & Diluted Net loss
per common share $ (0.36) $ (0.06)
Shares used in computing
basic and diluted
net loss per common share 11,690,105 7,000,000
OTHER DATA:
EBITDA* $ (3,148) $ (211)
As of
March 31, December 31,
2000 1999
BALANCE SHEET DATA:
Cash and cash equivalents and
short-term investments $ 45,008 $ 954
Property and Equipment, net 8,641 7,364
Intangibles, net 3,466 3,838
Total assets 59,693 15,840
Debt 4,254 7,306
Stockholders' equity 50,189 1,364
* EBITDA represents earnings (loss) from operations before interest,
taxes, depreciation and amortization, the primary measure of operating
performance is net earnings (loss). Although EBITDA is a measure commonly
used in the company's industry it should not be construed as alternative to
net income (loss), determined in accordance with generally accepted accounting
principles (GAAP), as an indicator of operating performance or as alternative
to cash flows from operating activities, determined in accordance with GAAP.
In addition, the measure of EBITDA presented herein by the company may not be
comparable to other similarly titled measures of other companies.
SOURCE FASTNET Corporation
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Related links:
http://www.fast.net
http://www.frbinc.com
CONTACT:
David Van Allen, Chief Executive Officer,
dave@fast.net, or Stanley Bielicki, Chief Financial Officer,
stan@fast.net, both of FASTNET Corporation, 610-266-6700; or Mark
Shaffer, General Information, 312-640-6763, or
mshaffer@frb.bsmg.com, or Lisa Fortuna, investors, 312-640-6779,
or lfortuna@frb.bsmg.com, or Tim Grace, media, 312-274-2240, or
tgrace@frb.bsmg.com, all of The Financial Relations Board
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